Enterprise in capital markets presents a number of risks and challenges including lack of access to finance to sustain businesses and insurance to protect against losses. This is because low-income business owners do not have the funds to participate in the formal capital markets or insurance sectors or if they do, they are classified as high risk being penalized with higher interest rates. Starting in the late 1950s, microfinance as a service has become a viable alternative for low-income business owners to protect themselves while operating their businesses. Microinsurance has also become an invaluable tool to help the poor who disproportionally face greater risks from perils like health and environmental issues because of climate risks as they operate their businesses.
This capstone project is a development tool to educate the public about inclusive financial services like microfinance and microinsurance.
The project was inspired by published research the primary investigator conducted with entrepreneurs in developing countries while enrolled as an undergraduate in Economics
and conversations about microinsurance because microinsurance is a type of low-cost insurance designed for low-income individuals .